Madoff judge rules against feeder fund investors

A federal bankruptcy judge said on Tuesday investors in feeder funds who lost money in Bernard Madoff's Ponzi scheme do not qualify as customers of the now-imprisoned swindler.

U.S. Bankruptcy Judge Burton Lifland in New York said the ruling means the investors are not eligible to receive as much as $500,000 each from a federal fund designed to help customers of failed brokerages.

Irving Picard, the trustee seeking money for and reviewing claims of Madoff's victims, has rejected claims of feeder fund investors, saying they had invested only indirectly with the former Bernard L. Madoff Investment Securities LLC.